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OECD and Greece to cooperate on reforms needed to ensure inclusive growth

12/03/2015 - The OECD and Greece agreed today to work together on the design and implementation of the structural reforms needed to ensure inclusive and sustainable economic growth.

OECD Secretary-General Angel Gurría and Greek Prime Minister Alexis Tsipras signed a Joint Document of Co-operation to strengthen the collaboration following talks in Paris between OECD experts and Greek ministers on a range of issues. They include:

Boosting job creation. The OECD can help the Greek government improve active labour market policies and in particular assist the young to find jobs and upgrade their skills. Reforms are required to ensure that jobs created meet real needs and generalise good labour practices.

Reducing the administrative burden to business. According to OECD analysis, licensing procedures, including land-zoning, are complex. Simplifying procedures through, for instance, greater use of e-government needs to be encouraged. The Greek government is keen to encourage young people in particular to set up new businesses in promising areas such as e-commerce, green technologies and software development.

Public finance and spending. The OECD and the Greek government plan to work together to improve the efficiency of public financial management frameworks.

Instilling a culture of transparency and integrity. The OECD can help provide technical assistance on making general principles, such as the National Plan against Corruption, fully operational. The proper training of officials to implement the new legal framework on e-procurement is essential.

Strengthening the tax system. Tackling tax avoidance and evasion is an area where the OECD is taking the lead internationally. More than 90 countries and jurisdictions have already publicly committed to implementation of the new global standard on automatic exchange of tax information. Rapid implementation of the standard in Greece will help trace funds held offshore to evade taxes. The OECD can also provide advice and assistance in reforming the VAT system to streamline rates and improve fairness and efficiency.

Disrupting oligopolies and cartels through greater competition and product market reform. A key element is to tackle bid-rigging. Regulatory improvements are needed for a dynamic business environment and are a necessary complement to a thriving social economy.

“Cooperation between the OECD and the Government of Prime Minister Tsipras got off to a good start,” said Mr Gurría. Speaking to the media with Mr Tsipras, he said: “We have had highly productive talks which will help set the direction for our collaboration over the coming months. We have identified the areas where we need to work together and have set up a joint steering group for this purpose.” (Read the speech)

“The OECD is not replacing any other institution that the government is working with. We are involved because we were asked by one of our founding member countries to offer help and advice on their reform programme. We are going to listen to them and work together with them. The Greeks know the challenges they face better than anyone. Our aim is to help kick-start growth and facilitate an inclusive and sustainable recovery of the Greek economy, so we can improve the well-being of all Greeks.”

Since the crisis, the OECD has been providing targeted advice to a number of governments, including Mexico, Ireland, Portugal, Italy, Spain and France, over and above the regular programme of analysis and recommendations provided to its member countries. Using an evidence-based approach to establish best practice in a range of economic, social and environmental areas, the OECD has been able to help countries design policies adapted to their circumstances, in order to improve growth and well-being.

OECD recommendations are regularly used as the basis of reforms and legislation. In Mexico, for instance, OECD guidelines on fighting bid-rigging in public procurement have led to a review of legislation and are being used to help the country’s national electricity company improve the efficiency and transparency of how it uses its budget.

The drive toward greater tax transparency is having a tangible effect on taxpayer behaviour, helping countries like Greece. OECD analysis of voluntary disclosure programmes shows that since 2009, more than 500,000 taxpayers in various OECD and G20 countries have voluntarily disclosed hidden income and wealth, leading to more than EUR 38 billion of additional tax revenues.

Greece is already making important progress in a number of other reform areas identified by the OECD, such as making its competition policy framework more efficient through enhancing the effectiveness and independence of the Hellenic Competition Commission (HCC) Under the agreement signed today the OECD will aim in the short-term to help Greece develop its reform programme in more detail, and in the medium and long-term, assist the government with the implementation of the policies. The co-ordination of the joint steering group set up today, which will be composed of OECD officials and representatives of the Greek Government, will be managed by Mr Euclid Tsakalotos (on behalf of the Prime Minister of Greece) and Mrs Gabriela Ramos (on behalf of the Secretary-General of the OECD).

Among those accompanying Prime Minister Tsipras at today’s discussions were Yanis Varoufakis, Finance Minister, and Euclid Tsakalotos, Alternate Minister for International Economic Relations.